New figures reveal the cities worst hit by Help to Buy regional price caps

Personal finance experts have issued a warning, that thousands of prospective first-time buyers must act now if they are to secure a Help to Buy property on just a 5% deposit.

The guidance from money.co.uk comes just after the government confirmed last week, that applications for the new Help to Buy scheme will open from December 16. This means buyers have just over three weeks to reserve properties using the current, more generous equity loan scheme- the deadline for applications falls on December 15.

After that, first-time purchasers may face reduced options through regional price caps being introduced across England. While the government has aimed to keep regional caps in line with local house prices, research has revealed almost two fifths (39%) of new build properties within Local Authorities across the country are higher than regional price caps being introduced.

With this in mind, research from money.co.uk has revealed the following:

The cities in England most affected by new regional Help to Buy price caps
First-time buyer hotspots across England most affected by regional Help to Buy price cap
The Local Authorities most affected by regional Help to Buy Price caps

Cities most affected by regional Help to Buy price caps:

Findings reveal that cities affected by the new regional price caps span all regions of the country. Cambridge is the city where first time buyers are set to struggle the most to purchase a home as the average new-build home costs £606,151.

It is almost £200,000 more than the price that the government has capped the scheme within the city’s region (The East of England). Second on the list is the Yorkshire city of Ripon (+£120,324), followed by York (+£117,519) and Bath (+£111,002).

Overall new build homes in one in four (26%) cities across the country have an average new build house cost above their regional price cap.

First-time buyer hotspots most affected by regional Help to Buy price caps:

Furthermore, money.co.uk has researched the most popular places in the country for first-time buyers to invest in a property through the current scheme since it began in 2013.

Out of all locations in England, Central Bedfordshire has been the most popular place in the country for first-time buyers to invest in a property through the scheme since it began.

However, the average price of new build homes in Central Bedfordshire are in fact +£1,234 higher than the £407,400 price cap being introduced in the region in April 2021.

Overall a third of local authorities among the 15 most popular Help to Buy locations are estimated to be negatively impacted by the new price cap being introduced. These include Leeds (+£19,355), Cheshire East (+103,304), Cheshire West and Chester (+£62,747) and South Gloucestershire (+£4,270).

The Local Authorities most affected by regional Help to Buy Price caps:

The average price of a new build home within 130 LA’s, is higher than their regional Help to Buy price cap. Within this, Rochford is the area where first time buyers are set to struggle the most to purchase a new build home, as the average new build is £226,857 higher than the East of England price cap.

Second to Rochford is the authority of Cotswold (+223,838), followed by Chiltern (+223,828). Overall almost two-fifths (39%) of England’s Local Authorities are higher than their regional price caps.

Sources:

https://www.gov.uk/government/statistical-data-sets/uk-house-price-index-data-downloads-july-2020
https://www.gov.uk/government/statistics/help-to-buy-equity-loan-scheme-statistics-data-to-31-march-2020

Please note, the LA table does not include the cities that fall under Local Authorities, as they are highlighted within the cities table.

Kindly shared by money.co.uk

Main article photo courtesy of Pixabay